Oil spikes as OPEC readies cut

Oil spikes as OPEC readies cut

PABLO GORONDI
Monday, December 15, 2008
Oil prices were up sharply near $49 (U.S._ a barrel Monday as investors anticipated OPEC will announce a large production cut at its meeting this week.

By midday in Europe, light, sweet crude for January delivery was up $2.47 to $48.75 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell $1.70 to settle at $46.28.

In London, January Brent crude rose $2.06 to $48.47 on the ICE Futures exchange.

The Organization of Petroleum Exporting Countries, which accounts for 40 per cent of global supply, has signalled it plans to announce a substantial reduction of output quotas at its meeting Wednesday in Algeria.

“The extent of such cuts is still unclear and this uncertainty has been a source of continuing volatility in futures markets,” said a report by analysts at KBC Market Services in Great Britain.

On Monday, the Nymex contract was trading in a relatively wide range between $45.92 and $49.00.

Olivier Jakob of Petromatrix in Switzerland noted that trading volumes last week showed a “sharp rebound” for Nymex crude, “close to double the volume seen in the two previous weeks” and near the highest levels seen this year, above 700,000 contracts a day.

Iranian Oil Minister Gholam Hossein Nozari was quoted Sunday on his ministry's web site saying that Iran would push for a production cut of 1.5 to 2 million barrels per day.

Analysts have questioned whether OPEC members will follow through with any announced cut.

“They're talking about a severe cut, but the question is their discipline,” said Christoffer Moltke-Leth, head of sales trading at investment firm Saxo Capital Markets in Singapore. “Unless they really surprise the market, this cut may not support the price much.”

Oil has jumped from a four-year low earlier this month of $40.50 a barrel on expectations that an OPEC output reduction could be the catalyst to stabilize the oil price, which has fallen 65 per cent since July.

“For the first time in several weeks, there are signs that crude prices might have bottomed out and could be heading upward again,” KBC Market Services said.

Investors largely ignored OPEC's 1.5 million barrels a day output cut in October, focusing instead on a slowing global economy that's hurt crude demand.

More bad macro-economic and company news from the U.S. and Europe over the coming weeks will likely push oil prices lower, Mr. Moltke-Leth said.

“I expect crude to continue its slide and I don't think OPEC is going to prevent that,” he said. “Demand destruction in the major economies will still very much be on the agenda. We could go as low as $30 a barrel.”

Petromatrix's Mr. Jakob said that while no new data was expected this week to show a global rise in appetite for crude, the impact of the OPEC meeting on the supply side likely would be considerable.

“There is no data available to point to an improving demand, but this week will be focused on the supply side and the global supply and demand for the first half of 2009 will need to be rewritten on Thursday after the OPEC decision,” he said.

In other Nymex trading, gasoline futures rose 5.40 cents to $1.1317. Heating oil gained 7.48 cents to $1.5682 a gallon while natural gas for January delivery jumped 9.7 cents to 5.585 per 1,000 cubic feet.

© Copyright The Globe and Mail

Markets love the White House

Markets love the White House

RTGAM






If you were sitting on the edge of your seat on Friday morning, with visions of double-digit percentage losses at major stock market indexes, you weren't alone. The vote in the U.S. Senate on Thursday night against the $14-billion (U.S.) bailout for the Big Three auto makers triggered scenarios of massive corporate failures and millions of additional job losses - not to mention the potential loss of more U.S. pride and another U.S. city (Detroit).


However, just as the $700-billion rescue plan took a couple of attempts to succeed, investors clued in pretty fast that the auto bailout plan was not about to be shelved without another push. Soon after markets opened with steep, though hardly disastrous, losses, the White House said it would consider helping the auto makers with a slice of the $700-billion rescue plan that was originally earmarked for financial firms.


The markets loved the idea - and were even willing to ignore the other bad news for the day: Bernard Madoff, a former Wall Street icon, had been charged in connection to a $50-billion Ponzi scheme. The Dow Jones industrial average closed at 8629.68, up 64.59 points or 0.8 per cent. The broader S&P 500 closed at 879.74, up 6.15 points or 0.7 per cent.


Although General Motors Corp. shares ended the day down 4.4 per cent, that was a marked recovery from the start of trading, when the shares had been down more than 30 per cent. Ford Motor Co. did even better, rising 4.8 per cent.


In other moves, Intel Corp. rose 5.3 per cent, JPMorgan Chase & Co. rose 3.3 per cent and Citigroup Inc. rose 1.7 per cent.


In Canada, the S&P/TSX composite index closed at 8515.45, up 123.55 or 1.5 per cent. This was an even bigger rebound than in the United States, given that the index began the day down more than 3 per cent. Auto parts manufacturer Magna International Inc. fell a mere 0.2 per cent after being down nearly 12 per cent at the start of trading.


Financials were generally strong, with Royal Bank of Canada up 2.5 per cent and Bank of Nova Scotia up 2.1 per cent. Energy stocks were mixed, after the price of crude oil plunged, then recovered slightly and ended at $46.28 a barrel, down $1.70. Suncor Energy Inc. fell 3.5 per cent and EnCana Corp. fell 0.5 per cent, but Canadian Natural Resources Ltd. rose 2.7 per cent.

Copyright 2001 The Globe and Mail

I'm back from Vegas-and Stocks Ready To Plunge

Greenback a cure for commodities?

Thursday, December 11, 2008
Here's Allan Robinson's At The Bell which you'll find in Friday's newspaper:The U.S. dollar tumbled yesterday between 1 and 4.7 per cent against the world's major currencies and that could be good for U.S.-dollar-denominated commodity prices.

The main beneficiary of the swing during the past few days has been gold, which is once again trading above $800 (U.S.) an ounce. Oil prices have also shown some signs of strength.WHAT ARE THE EXPECTATIONS?But the question shell-shocked investors in commodities must be asking is whether the flight to safety that has pushed the U.S. dollar higher, and commodities lower, over the past few months is over?

“This has been the sharpest and steepest downturn in aggregate in commodity and energy prices ever,” said Bart Melek, global commodity strategist for BMO Nesbitt Burns Inc. “In terms of magnitude it's not much different; it's the speed of it.”Much of the pullback is a result of the trade finance cutbacks and de-leveraging by banks and hedge funds as a result of the credit crisis because the commodity price declines are far in excess of the supply and demand fundamentals, he said.

“We still have more pain coming, but I don't see a lot of downside remaining.”However, base metals and bulk commodities could remain under pressure for much of 2009 with only a modest turnaround expected in the latter part of the year, according to BMO Nesbitt Burns. Large segments of the nickel, zinc, aluminum and copper markets are operating below their cost of production, it said.

The rise in oil during the past few days is a result of the stronger dollar and talk of production cuts by the Organization of Petroleum Exporting Countries, said Robert Tebbutt, vice-president of Peregrine Financial Group Canada Inc.As far as the equity markets' ability to look ahead goes, the only major index up strongly during the past month is China's CSI 300 index, which has climbed 13.6 per cent.

That could bode well for commodities.So it looks like the beleaguered manufacturing sector at least can expect continued relief from declining costs. The producer price index scheduled for release today is forecast to have declined 2 per cent in November, compared with a 2.8-per-cent drop in October, according to a survey of economists by Bloomberg.

That would mark the fourth consecutive monthly decline.



Wall Street poised to plunge

SARA LEPRO
Friday, December 12, 2008
NEW YORK — A dejected stock market headed for a plunge at the opening of trading Friday as the Senate's rejection of a $14-billion (U.S.) lifeline for the auto industry intensified investors' concerns about a deepening recession.

The defeat of the bailout bill late Thursday has prompted calls from lawmakers for the Bush administration to use a portion of the $700-billion financial rescue package to prop up the struggling companies. The bill failed after the United Auto Workers refused to meet Republican demands for big wage cuts.

General Motors Corp. and Chrysler LLC have said they could run out of cash within weeks without government help. Ford Motor Co., which would also be eligible for aid under the bill, has said it has enough cash to make it through next year.

The failure of the bill is feeding investors' concerns about job losses. More evidence of the ravaged labour market came late Thursday, as Bank of America Corp. said it expected to cut as many as 35,000 jobs over the next three years, including some from investment bank Merrill Lynch & Co., which it agreed to buy in September.

Dow Jones industrial average futures dropped 310, or 3.61 per cent, to 8,287. Standard & Poor's 500 index futures fell 40.40, or 4.62 per cent, to 834.10, while Nasdaq 100 index futures fell 45.00, or 3.78 per cent, to 1,145.00.

Meanwhile, more glum economic data is expected Friday. The Commerce Department will release its retail sales report for November at 8:30 a.m. (ET). The Labour Department is expected to release the producer price index for November at the same time. Later Friday morning, the Commerce Department will issue its report on business inventories for October.

The Commerce Department is expected to report that retail sales fell in November for a fifth straight month despite a surge of shoppers over the Thanksgiving weekend. The report is a closely watched gauge considering that consumer spending drives more than two-thirds of the U.S. economy.

The reports will follow a bleak report from the Labour Department Thursday that said initial jobless claims rose to the highest level in 26 years last week.

Job losses have become investors' primary concern in recent weeks, as companies across many sectors, including AT&T Inc., DuPont, Dow Chemical Co., and Freeport-McMoRan Copper & Gold Inc., have announced thousands of layoffs. Analysts don't expect the announcements to end any time soon.

If one of the automakers declared bankruptcy, some estimate as many as 3 million U.S. jobs could be lost next year.

In premarket trading, Ford shares dropped 44 cents, or 15 per cent, to $2.46, while GM plummeted $1.31, or 32 per cent, to $2.81.

Bond prices were mixed Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.51 per cent from 2.63 per cent late Thursday. The yield on the three-month T-bill was unchanged from late Thursday at 0.02 per cent. The bill has been in great demand because of the safety it offers investors.

The U.S. dollar rose against other major currencies, while gold prices fell.

Light, sweet crude fell $2.58 to $45.40 in electronic premarket trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average plunged 5.56 per cent. In afternoon trading, Britain's FTSE 100 was down 3.92 per cent, Germany's DAX index was down 4.80 per cent, and France's CAC-40 was down 5.35 per cent.

© Copyright The Globe and Mail

Talisman Energy Announces First Oil From the Song Doc Field in Vietnam

TLM- Triple Bottom A Charm?

Talisman Energy Announces First Oil From the Song Doc Field in Vietnam

18:46 EST Thursday, December 04, 2008
CALGARY, ALBERTA--(Marketwire - Dec. 4, 2008) - Talisman (Vietnam 46/02) Ltd. ("Talisman"), a wholly owned subsidiary of Talisman Energy Inc. (TSX:TLM) (NYSE:TLM), has announced first oil production from the Song Doc field in Block 46/02 offshore Vietnam.

Gross production from five pre-drilled wells is expected to reach approximately 25,000 bbls/d by early 2009. An additional three development wells are currently being drilled. Talisman's share of proved and probable reserves in the Song Doc field is estimated at six mmbbls, with proved reserves of three mmbbls.

Talisman has a 30% interest in Block 46/02 and in the Truong Son Joint Operating Company, which operates the Block. Co-venturers are PetroVietnam Exploration and Production Company at 40% and Petronas Carigali Overseas Sdn Bhd with the remaining 30%. The Song Doc field facilities comprise a Floating Production Storage and Offloading (FPSO) vessel and wellhead platform.

The FPSO is a tanker conversion carried out by MODEC at the COSCO yard in Dalian, China. The Song Doc wellhead platform was fabricated by Petroleum Technical Services Company in Vung Tau, Vietnam.

Talisman Energy Inc. is an independent upstream oil and gas company headquartered in Calgary, Alberta, Canada. The Company and its subsidiaries have operations in North America, the North Sea, Southeast Asia and North Africa. Talisman's subsidiaries are also active in a number of other international areas. Talisman is committed to conducting its business in an ethically, socially and environmentally responsible manner. The Company is a participant in the United Nations Global Compact and included in the Dow Jones Sustainability (North America) Index. Talisman's shares are listed on the Toronto Stock Exchange in Canada and the New York Stock Exchange in the United States under the symbol TLM.

Advisories

This press release contains statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information includes, among others, statements regarding:

- estimated production and timing;

- business plans for drilling, exploration, development and estimated timing;

- business strategy and plans; and

- other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.

Often, but not always, forward-looking information uses words or phrases such as: "expects", "does not expect" or "is expected", "anticipates" or "does not anticipate", "plans" or "planned", "estimates" or "estimated", "projects" or "projected", "forecasts" or "forecasted", "believes", "intends", "likely", "possible", "probable", "scheduled", "positioned", "goal", "objective" or states that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

The following assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this press release. Information regarding business plans for drilling and exploration assumes that the extraction of crude oil, natural gas and natural gas liquids remains economic.

Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Talisman and described in the forward-looking information contained in this press release. The material risk factors include, but are not limited to:

- the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable facilities outages;

- risks and uncertainties involving geology of oil and gas deposits;

- potential delays or changes in plans with respect to exploration or development projects or capital expenditures;

- fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;

- risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action);

- changes in general economic and business conditions;

- the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; and

- uncertainties as to the availability and cost of financing and changes in capital markets.

Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other factors which could affect the Company's operations or financial results are included in the Company's most recent Annual Information Form and Annual Financial Report. In addition, information is available in the Company's other reports on file with Canadian securities regulatory authorities and the United States Securities and Exchange Commission.

Forward-looking information is based on the estimates and opinions of the Company's management at the time the information is released. The Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change, except as required by law.

Reserves Data and Other Oil and Gas Information

Talisman's disclosure of reserves data and other oil and gas information is made in reliance on an exemption granted to Talisman by Canadian securities regulatory authorities, which permits Talisman to provide certain disclosure in accordance with U.S. disclosure requirements. The information provided by Talisman in this press release may differ from the corresponding information prepared in accordance with Canadian disclosure standards under National Instrument 51-101 ("NI 51-101"). Information on the differences between the U.S. requirements and the NI 51-101 requirements is set forth under the heading "Note Regarding Reserves Data and Other Oil and Gas Information" in Talisman's Annual Information Form.

Talisman's proved reserves have been estimated using the standards contained in Regulation S-X of the U.S. Securities and Exchange Commission ("SEC"). U.S. practice is to disclose net proved reserves after the deduction of estimated royalty burdens, including net profit interests. Talisman makes additional voluntary disclosure of gross proved reserves.

Talisman also makes voluntary disclosure of probable reserves which have been estimated using the definition set out by the Society of Petroleum Engineers/World Petroleum Congress ("SPE/WPC"). Talisman believes that there is no material difference between the SPE/WPC definition for probable reserves and the Canadian Oil and Gas Handbook definition for probable reserves.

The SEC normally permits oil and gas companies to disclose in their filings with the SEC only proved reserves that have been demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic conditions and operating conditions. Any probable reserves and the calculations with respect thereto included in this press release do not meet the SEC's standards for inclusion in documents filed with the SEC.

The exemption granted to Talisman also permits it to disclose internally evaluated reserves data. Any reserves data contained in press release reflects Talisman's estimates of its reserves. While Talisman annually obtains an independent audit of a portion of its proved and probable reserves, no independent qualified reserves evaluator or auditor was involved in the preparation of the reserves data disclosed in this press release.

In this press release, Talisman makes reference to proved and probable reserves for the Song Doc field. As at year end 2007, Talisman had 43.7 mmboe of proved reserves and 67.6 mmboe of probable reserves in Southeast Asia. The estimates of reserves for individual properties may not reflect the same confidence levels as estimates of reserves for all properties due to the effects of aggregation.

Gross Production

In this press release, Talisman makes reference to production volumes. Such production volumes are stated on a gross basis, which means they are stated prior to the deduction of royalties and similar payments. In the U.S., net production volumes are reported after the deduction of these amounts. U.S. readers may refer to the table headed "Continuity of Proved Net Reserves" in Talisman's most recent Annual Information Form for a statement of Talisman's net production volumes by reporting segment that are comparable to those made by U.S. companies subject to SEC reporting and disclosure requirements.

Boe conversion

In this press release, the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (mcf) of natural gas for one barrel of oil and is based on an energy equivalence conversion method. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead.

FOR FURTHER INFORMATION PLEASE CONTACT:

Talisman Energy Inc. - Media and General Inquiries
David Mann, Vice-President,
Corporate & Investor Communications
(403) 237-1196
(403) 237-1210 (FAX)
Email: tlm@talisman-energy.com
Website: www.talisman-energy.com

or
Talisman Energy Inc. - Shareholder and Investor Inquiries
Christopher J. LeGallais, Vice-President,
Investor Relations
(403) 237-1957
(403) 237-1210 (FAX)
Email: tlm@talisman-energy.com
Website: www.talisman-energy.com